In the evolving landscape of Kenya’s capital markets, a curious paradox has emerged at the start of February 2026. While the primary market is celebrating a historic resurgence—marked by massive oversubscriptions to blue-chip debt—the secondary market remains a “ghost town” for corporate paper.
The recently concluded KSh 20 billion Domestic Medium-Term Note (MTN) by East African Breweries PLC (EABL) and the KSh 40 billion Green Bond by Safaricom were intended to be the catalysts for a vibrant corporate debt ecosystem. Yet, as of Monday, February 2, 2026, trading data from the Nairobi Securities Exchange (NSE) reveals a familiar, stubborn trend: these high-profile bonds are failing to spark the secondary trading volumes needed for true market liquidity.
The Great Stagnation: Why Safaricom and EABL Bonds are “Locked” in 2026
To understand why these financial giants aren’t moving in the secondary market, one must look at the data from the final quarter of 2025. While total bond turnover at the NSE hit a record KSh 2.7 trillion in 2025, an eye-watering 99% of that activity was in Government Treasury Bonds. Corporate bond turnover remained “negligible,” highlighting a structural bottleneck that neither Safaricom’s green credentials nor EABL’s 11.8% interest rate has been able to break.
1. The “Buy-and-Hold” Institutional Grip
The primary reason for the lack of secondary trading is the profile of the investors who snapped up these notes.
The Pension Fund Trap: Over 80% of corporate debt in Kenya is held by pension funds, insurance companies, and large asset managers. These institutions are “yield-hungry” and tend to hold assets to maturity to meet long-term liabilities.
The Supply Scarcity: Because institutional investors view Safaricom and EABL as “risk-free” corporate proxies, they have no incentive to sell. In a market where high-quality private paper is rare, once a bond is bought, it effectively vanishes from the market.
2. The “Sovereign Shadow” Effect
In 2026, the Government of Kenya continues to be its own biggest competitor for capital.
Crowding Out: With Treasury bills and bonds offering competitive yields to fund the national budget (raising over KSh 260 billion in Q4 2025 alone), investors often prefer the liquidity of government paper.
Liquidity Premium: A bank can sell a Treasury bond in minutes because there is always a buyer. However, trying to offload a corporate bond in the secondary market can take days or weeks due to the lack of active market makers. This “liquidity risk” keeps smaller retail investors away, further drying up the trade.
3. Pricing Disconnectivity
Secondary market trading thrives on price volatility and different views on risk. However, Safaricom and EABL are so stable that their “clean prices” rarely move.
Lack of Arbitrage: Without significant price swings, there is no opportunity for traders to make a profit on the “spread.” Most trades occurring in early 2026 are “off-market” negotiated deals between large institutions, which do not contribute to the public ticker or the NSE’s daily turnover statistics.
